Long Beach Planning Commission votes to block lender's new branch

The Planning Commission voted Thursday against allowing a financial service and lending company to open at Pacific Avenue and Pacific Coast Highway because of concerns over its alleged predatory practices.

Pennbrooke Financial Services, a car title loan company, has been met with nothing but opposition from Long Beach residents and the Wrigley Association since voicing its plans to move into a derelict building at the location.

The vote, 3-2 against, with Commissioners Becky Blair and Alan Fox voting in support, came after strong community opposition at the meeting.

Commissioner Mark Christoffels said that he didn't think it was the proper thing to grant at this point.

"I am not ready to give up on all the hard work that both the residents and city have done for this community," he said.

Most of the residents were opposed because of the yearly variable 125 percent interest rate that the company plans to charge. In California, there is no interest rate cap for loans of more than $2,500.

Yet Pennbrooke is willing to occupy a property that has been vacant for more than a decade and is in dire need of an upgrade.

Pennbrooke has filed applications to open two offices in Long Beach and four more in the surrounding area, including one at the heavily traveled Pacific Avenue gateway to the Wrigley area. The other proposed Long Beach location is at 2706 E. South St. in North Long Beach.

But residents made it clear Thursday that this isn't what they want.

"It's not what we're looking for to upgrade our neighborhood," said Lisa Wibroe of the Wrigley Association.

Barbara Sinclair agreed, adding that it is a business that "preys on the most desperate people in the community."

"This business would, if approved, have done really well because there are plenty of people who are desperate in these economic times," she said. "But this business will bring nothing to our community, nothing at all."

Despite the reception, David Carlat, representing the company, said Pennbrooke is a well-established, national lending institution with more than 500 locations throughout the United States and it would bring "loans to those who cannot receive financial assistance anywhere else."

"Many small businesses are in need of short-term cash flow and they have no place else to go," he said. "We would be able to provide them with a check the same day to help them through their difficult time."

Auto loan companies, however, have come under criticism for their high rates and the general lack of oversight of the industry.

When the commission asked Carlat what the company's annual percentage rate is, Carlat replied: "It's a deceptive question that requires a deceptive answer."

Carlat said that the rate is one-third of 1 percent per day, which was later contradicted when he said the average interest per day is $16 on a $2,500 loan.

The company said it targets clients who are small- business owners and independent contractors seeking short-term bridge loans.

However, Jack Smith of the Central Project Area Council said that a fresh paint job, some new plants out front and remodeling of the inside is all just a cover of what will take place at Pennbrooke.

"This business adds nothing to the public or the Wrigley neighborhood that has worked so hard and done so much to grow," he said. "A title loan company spreads financial blight, and that is not what this community needs."

The commission agreed, but still must discuss the issue at an Aug. 16 meeting, when city staff will provide the legal grounds to deny Pennbrooke's conditional use permit.